Even the Pope Says Globalization has run amok and steam rolled workers

Pope Benedict XVI on Tuesday called for a radical rethinking of the global economy, criticizing a growing divide between rich and poor and urging the establishment of a “world political authority” to oversee the economy and work for the “common good.”

He criticized the current economic system, “where the pernicious effects of sin are evident,” and urged financiers in particular to “rediscover the genuinely ethical foundation of their activity.”

The global market has stimulated first and foremost, on the part of rich countries, a search for areas in which to outsource production at low cost with a view to reducing the prices of many goods, increasing purchasing power and thus accelerating the rate of development in terms of greater availability of consumer goods for the domestic market. Consequently, the market has prompted new forms of competition between States as they seek to attract foreign businesses to set up production centres, by means of a variety of instruments, including favourable fiscal regimes and deregulation of the labour market. These processes have led to a downsizing of social security systems as the price to be paid for seeking greater competitive advantage in the global market, with consequent grave danger for the rights of workers, for fundamental human rights and for the solidarity associated with the traditional forms of the social State. Systems of social security can lose the capacity to carry out their task, both in emerging countries and in those that were among the earliest to develop, as well as in poor countries. Here budgetary policies, with cuts in social spending often made under pressure from international financial institutions, can leave citizens powerless in the face of old and new risks; such powerlessness is increased by the lack of effective protection on the part of workers' associations.

I'm fairly shocked on this paragraph speaking the truth of this continual globalist agenda of open migration (corporate controlled of course!)

The mobility of labour, associated with a climate of deregulation, is an important phenomenon with certain positive aspects, because it can stimulate wealth production and cultural exchange. Nevertheless, uncertainty over working conditions caused by mobility and deregulation, when it becomes endemic, tends to create new forms of psychological instability, giving rise to difficulty in forging coherent life-plans, including that of marriage. This leads to situations of human decline, to say nothing of the waste of social resources. In comparison with the casualties of industrial society in the past, unemployment today provokes new forms of economic marginalization, and the current crisis can only make this situation worse. Being out of work or dependent on public or private assistance for a prolonged period undermines the freedom and creativity of the person and his family and social relationships, causing great psychological and spiritual suffering.

On globalization:

The processes of globalization, suitably understood and directed, open up the unprecedented possibility of large-scale redistribution of wealth on a world-wide scale; if badly directed, however, they can lead to an increase in poverty and inequality, and could even trigger a global crisis. It is necessary to correct the malfunctions, some of them serious, that cause new divisions between peoples and within peoples, and also to ensure that the redistribution of wealth does not come about through the redistribution or increase of poverty: a real danger if the present situation were to be badly managed. For a long time it was thought that poor peoples should remain at a fixed stage of development, and should be content to receive assistance from the philanthropy of developed peoples. Paul VI strongly opposed this mentality in Populorum Progressio. Today the material resources available for rescuing these peoples from poverty are potentially greater than before, but they have ended up largely in the hands of people from developed countries, who have benefited more from the liberalization that has occurred in the mobility of capital and labour. The world-wide diffusion of forms of prosperity should not therefore be held up by projects that are self-centred, protectionist or at the service of private interests.

It's fairly shocking to put the head of the Catholic Church's words on an economics blog and assuredly the call for more global governing bodies will raise the hair on your head. On the other hand, the truths contained within, that Nation-States are failing to protect their citizens, their communities, is assuredly a theme which most of us will agree with.

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I wanted to post mine here- but held back due to previous instances calling my link of Catholic ethics to economics "economic fiction".

This document was originally written in Italian- few Church documents in the last 100 years were sourced in Latin.

I would also post links to my two articles on this subject on my personal non-economics related blog, as well as, for logical continuity, the seven documents over the past century and a quarter that evolved this doctrine and to which Pope Benedict refers:

Why I'm so different on economics was written during one of the times when I got introspective about my own "economic fiction"- when I first realized I was following the Popes more than modern economists.

Charity in Truth was written today- my response to my first read-through of Caritas in Veritate, which could also be translated as Love in Truth, depending on how you read the Latin. I choose charity for a reason, for that is the First Degree of the Knights of Columbus, an order to which I belong.

And now, the seven Papal documents, so far, on economics, so that you can get a feeling of the history of the Doctrine of Distributism:Rerum Novarum from Pope Leo XIII

People think that Catholic doctrine never changes- but it's dogma that doesn't change, doctrine changes ever so slowly because of the concern for human error. The Doctrine of Distributism is as solid as any other form of economics I can think of, but unlike communism, which requires total subservience to the state, and capitalism, which requires total subservience to self, distributism is duty to protect other people's rights and justice to fulfill other people's needs. And in return- other people have a duty to protect YOUR rights and fulfill YOUR needs. Interdependence, rather than independence.

And that ethic I think is really worth thinking about.
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It's only 1/7th the story as far as this change in economic policy is concerned- or doctrine as the Church would have it. In fact, Caritas in Veritate is very much in keeping with the whole set going back to Rerum Novarum, which was Pope Leo XIII's answer to the challenge of Karl Marx that religion was just an opiate to keep the workers from rebelling. So the development of this document, and the Church on the side of "authentic progress" for the common man, has been in the works for more than a century (one of the documents in my list, Centesimus Annus from Pope John Paul II, was marking the 100 year anniversary of Rerum Novarum). So while it is a policy document- it's not the whole policy, not by a long shot. And I think, in the near future, we're going to see more from the Vatican on this topic as the doctrine develops further.

it's a very fine line here between religion and economics, even in this instance. In this document are some serious economic truths on current corporate feudalism going on, that's the only reason I posted it. I really don't want to go delving into the Catholic Church's doctrines, etc. just as much as I don't want to debate Islam or Judaism on EP. I guess I should add debate idol worship, i.e. Michael Jackson in this category.

This is different, the church made some astute observations, based on real global economic data on what's really going on under the guise of globalization and of course the Catholic Church is a major political force, just like Hinduism is.

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Economics without religion and ethics is a destructive force, and will always be so. THAT is the main problem, that the real global economic data is pointing to, and it's a problem that Americans in particular have a blind spot for. That is specifically what Pope Benedict was talking about when he wrote, in paragraph 44 of the document in question:

Many people today would claim that they owe nothing to anyone, except to themselves. They are concerned only with their rights, and they often have great difficulty in taking responsibility for their own and other people's integral development. Hence it is important to call for a renewed reflection on how rights presuppose duties, if they are not to become mere licence

That is what is going on under the guise of globalization: selfishness.
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Yeah, the Church to this day and over the years isn't exactly the bastion of purity but on the other hand, this is a major religious organization, leader and sure beats their usual "amnesty is all good" crud pounding in the U.S. I am not Catholic but as I understand how it works, the Pope is kind of like a President for life so if they are now coming out with some facts on how we have an increasing wealth disparity going on globally, well, good for them.

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And you can think of the Pope more as a Servant of the Once and Future King, left in charge of the Kingdom- it's all very monarchial and not very democratic, despite the last 100 Popes or so being chosen by election of the Cardinals (previous to that, they were hand picked by their predecessors).

Actually, the sad part to me (as I've never understood the "Amnesty is all good" position of the US Council of Catholic Bishops, who are supposed to be subordinate to the Holy Father) is that they'll likely see this as being in keeping with their "right to migrate for work or refuge from war and natural disaster". But to Pope Benedict's credit, he foresaw that argument somewhat, and thus included:

43. “The reality of human solidarity, which is a benefit for us, also imposes a duty”[105]. Many people today would claim that they owe nothing to anyone, except to themselves. They are concerned only with their rights, and they often have great difficulty in taking responsibility for their own and other people's integral development. Hence it is important to call for a renewed reflection on how rights presuppose duties, if they are not to become mere licence[106]. Nowadays we are witnessing a grave inconsistency. On the one hand, appeals are made to alleged rights, arbitrary and non-essential in nature, accompanied by the demand that they be recognized and promoted by public structures, while, on the other hand, elementary and basic rights remain unacknowledged and are violated in much of the world[107]. A link has often been noted between claims to a “right to excess”, and even to transgression and vice, within affluent societies, and the lack of food, drinkable water, basic instruction and elementary health care in areas of the underdeveloped world and on the outskirts of large metropolitan centres. The link consists in this: individual rights, when detached from a framework of duties which grants them their full meaning, can run wild, leading to an escalation of demands which is effectively unlimited and indiscriminate. An overemphasis on rights leads to a disregard for duties. Duties set a limit on rights because they point to the anthropological and ethical framework of which rights are a part, in this way ensuring that they do not become licence. Duties thereby reinforce rights and call for their defence and promotion as a task to be undertaken in the service of the common good. Otherwise, if the only basis of human rights is to be found in the deliberations of an assembly of citizens, those rights can be changed at any time, and so the duty to respect and pursue them fades from the common consciousness. Governments and international bodies can then lose sight of the objectivity and “inviolability” of rights. When this happens, the authentic development of peoples is endangered[108]. Such a way of thinking and acting compromises the authority of international bodies, especially in the eyes of those countries most in need of development. Indeed, the latter demand that the international community take up the duty of helping them to be “artisans of their own destiny”[109], that is, to take up duties of their own. The sharing of reciprocal duties is a more powerful incentive to action than the mere assertion of rights.

That, then, should become the argument against the USCCB and other pro-amnesty groups. We should acknowledge the right they demand, the human right to migrate- but we should also insist that right comes with a duty to learn the culture and laws of the country you're migrating to, and to follow that culture and laws rather than the culture and laws of the country you come from. Only in the sharing of reciprocal duty- can we have an economy that lifts all boats.
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some awareness of what open migration really means, especially to the social fabric....

We have had corporations and economics do massive pushes, presentations claiming global migration, all to earn a paycheck is a "win-win" and obviously, demanding people travel around the globe, move to China, India (both IBM and CISCO demanded this!) on a whim will splitter social relationships and communities.

But ya know, the Catholic Church as far as I know refused to deal with the reality of human sexual behavior and that has a tendency to make more people....so with global overpopulation these kind of conflicts will continue since people are trying to survive, eat.

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And I don't have time to quote the whole chapter anyway. Suffice it to say, you might not like his reasoning, but you can't say he refuses to deal with the reality of human sexual behavior and that has a tendency to make more people- when paragraphs 44-52 in Chapter 4 "THE DEVELOPMENT OF PEOPLE, RIGHTS AND DUTIES,
THE ENVIRONMENT" deal *directly* with that subject.
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Just results in fictional economics that harms the common worker. Ayn Rand was WRONG. Enlightened selfishness is not enough.

And that is why this document is about religion AND economics- because the problem with economics is that it has become divorced from religion, and has lost it's ethical underpinnings.

That's what Populism is all about- returning the ethical underpinnings to economics. One can't do that without religion, because it is religion that creates the ethical framework that populism rests upon. Without religion, you're missing the philosophical underpinning of why have an economy at all. After all, there are more scientific merit-based methods, now that we have computers, of assigning resources to the most productive projects.
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Look, I do it every day and ethics is not religion. Now I added this post simply because it was so detailed in economy policy but look, go elsewhere to tout the great Catholic church, once again this is an economics blog!

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Then why bother following it? After all- by profit alone, Goldman Sachs is doing the right thing! By maximum profits, who cares if the average worker gets hurt? By the mathematics alone- derivatives work.

Divorce ethics from religion, and the result is that the only thing you have to judge ethical standards by is short-term profit.
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I was enthralled by Ayn Rand when I was 13. I saw "The Fountainhead" movie with Gary Cooper. Shook me to my foundation. I read all her novels and joined The Objectivist cult.

I lost my school library privileges for reading her books and arguing with the librarian. I was also "The Man Without A Home Room" for refusing to salute the flag and recite the Lord's Prayer on command during group seance.

A few years later I began to notice differences between the heroic, cut and dried characters and politico-economic reality. I learned more about history. My right-wing leanings turned into a major bent. I continued my philosophical studies with an emphasis on science.

I have now concluded that Enlightened Self-Interest cannot exclude the environment, society, institutions, and the rest of the known universe. A Gestalt perspective is necessary for survival. Base instinct is not enough. The Honor System does not work very effectively. Laws and courts are necessary until such time as they are replaced by a better system or honest, generous and responsible people and institutions. Religion has not affected this debauchery to any meaningful extent and is more often used as a false justification for tyranny.

We are still in the Dark Ages where organized bullies victimize the weak.

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Were when God's Servant controlled the organized bullies, instead of letting them run wild.

Organized bullies victimizing the weak is just Evolution. It happens in all societies, in all species, in all cultures. There is NO way to escape tyranny, only ways to replace it with more tyranny.
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He is correct about the dislocations. Perhaps what is needed is some sort of getting together on what it is we need from globalization. It isn't going away, short of an externalities of biblical proportions (no pun intended). China isn't going away, nor shutting its doors from accepting more work. India isn't either. The key to globalization has always been wage differentials versus end product affordability.

His Holiness does have a history about discussion the social contract. Whereas the alleviation from poverty has been one of his focuses (along with spiritual matters), he is only now grasping the interlocking international nature of this scheme. For example, literally tens of millions of Chinese have been lifted out of dire poverty because of new manufacturing jobs. Previously they, and the majority of these "migrant workers" had come from the countryside, survived on subsidence farming. At the same time, as has been shown many times (even here on EP), a reversal of fortunes of sorts has happened in the First World. In places that had been traditional hubs of manufacturing, have gone onto a difference form of subsistence living, though instead of farming it has come in the form of welfare.

Who then, should be helped first? Because if it is the ultimate aim is to end globalization, then you could see those in China returning to a lifestyle a mere fraction of what they have now. At the same time, to do nothing in places like Ohio, you would see poverty only get worse. Unfortunately, in many cases for manufacturing, jobs have become a zero-sum game. The company that moved that assembly line job to China won't move it back to the US without closing up the China shop. This is especially true if the end product is to go to consumers in the West. These are things the Pope needs to weigh in.

Firstly, China can easily now build up it's own domestic production, so it's not an "either/or" scenario where magically if a U.S. corporation leaves (and the contracts are so intense, that's an interesting question of itself) that China itself cannot replace those manufacturing jobs as well as build up their own domestic economy and sectors.

Secondly, my issue is while the Pope is weighing in on economics and how the globe is returning to a world of feudal lords and serfs, that's weighing in....vs. somehow that validates a particular religion is economic policies and that's what I assuredly want to stay clear of on EP. We have readers, posters of all sorts of religions, or lack thereof, as well as political leanings...

ya know, sure way to divide is to discuss two topics, so ok, we're discussing one, politics but religion is way, way off from the purpose of EP.

Hey, I posted the Pope's letters of truth here because it is relevant, but only because it is the church addressing a separate area....globalization, economic policies.

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First, YOU are the one who has written about the Pope (and a great post and thread this is.) Just because the Pope is a religious figure who just so happened to weigh in on an economic imperative, how is it a no-no to discuss it's merits? How is the Pope - or anybody else -- who intelligently weighs in on this disaster called 'globalization' which is destroying OUR U.S. ECONOMY (among others) "way way off" the purpose of EP?

What - if the Pope were instead a Clown -- it would be OK to discuss him on an economics blog? (We can argue that comparative choice later.)

You've brought to the attention of your readers the Pope's most recent letter that, unfortunately, is likely being bashed by the Kool-Aid blog drinkers BECAUSE they like Pope bashing as much as the whole One World group hug that the globo-corporate fascists built in the hallowed name of GLOBALIZATION.

Seebert astutely acknowledges the primacy of varying strains of belief (otherwise known as the 'R' word) in all diverse cultures around the world which DO - liking it or not is irrelevant -- serve as the platform for societal laws and mores.

Good on the Pope for at least weighing in and getting this one right. For Christsake, (no fun intended)this is the same guy whose religion and peeps,like Mother Theresa, woefully went around overpopulous, third world countries and told deeply impoverished people that birth control was the devil's aphrodisiac, resulting in the creation of more poverty.

Most of all, thank you for having a pair to raise and discuss the Pope's important letter on your economics blog during this week where the Obama and the G8 are no doubt handing out more bad trade deals like candy to BRIC elites which will further degrade economic life around here - as the Pope has noted.

Yours truly,
-t.t.

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Sorry, it simply is not. One of the points of this site is for those of us who have econ from undergrad., grad. but this isn't our actual career area, to utilize that knowledge, education in writing about economic issues...

So trying to claim one must "get religion" to understand econ to me implies someone doesn't have much of a clue on the entire subject area of economics and that is seriously taking this site from it's real purpose...which is to get those who have economics study to use it, and those who don't...to go and get some and start learning.

The point of the site is we have really bad economic policy threaded throughout the U.S. which is destroying the U.S. middle class.

This post is simply that the Pope wrote an economics piece so that is simply a religious figure, taking on the topic of economics and the piece itself is based on a lot of economic statistical facts going on...

but just because a religious figure writes about econ does not mean econ requires religion. That's not the nature of the science.

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You spin the post, the intent and understanding the reason I originally posted the letters of truth from the Pope.

It is NOT who wrote the piece it is the comments, which try to spin this as somehow religion equates with economics and that's just pure fiction. The law of supply and demand isn't a subliminal message of the Crucifixion or if you believe it is...let me run over to ebay and try to sell a few then.

Cheese sandwich anyone?

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Funny, I expect the Pope to be a bit of a culturalist- it's in his job description after all. But to claim that his take on outsourcing causing wage depression in India is *racist* against Hindus, is downright insane!
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